Cost Management Flashcards
What is the process of cost management?
Plan Cost Management
Estimate Costs
Determine Budget
Control Costs
What is the key outputs of the Plan Cost
Management process?
Cost management plan
What are the key inputs to the Estimate
Cost process?
Cost management plan
Scope baseline
Project schedule
Human resource management plan
Risk register
Enterprise environmental factors
Organizational process assets
What are the key outputs of the Estimate
Cost process?
Activity cost estimates
Basis of estimates
Updates to project documents
What are the key outputs of the
Determine Budget process?
Cost baseline
Project funding requirements
Updates to project documents
What are the key outputs of the Control
Costs process?
Work performance information
Cost forecasts
Change requests
Updates to project management plan
and project documents
What are the main approaches to cost or
schedule estimating?
One-point estimating
Analogous estimating
Bottom-up estimating
Parametric estimating
Three-point estimating
What is analogous estimating?
Top-down estimating that use expert judgement and historical information to predict the future (for example,"The last three projects cost $25,000, or took six months, and so should this one")
What is bottom-up estimating?
Creating estimates based on the details
of the project (e.g., from the bottom of
the work breakdown structure), which
are then rolled up into the project estimates
What are parametric estimating?
Calculating estimates by looking at the relationships between variables on an activity (e.g., cost per line of code, hours per installation), based on historical information, industry requirement, standard metrics, or other sources
What is earned value management, and
how is it used?
A method of measuring project performance that looks at the value earned for work, accomplished, by reviewing project performance against the scope, schedule, and cost baselines
It can be used to predict future cost
performance and project completion
dates
What is the typical range for a rough
order of magnitude (ROM) estimate?
-25 to +75 percent from actual
What is the typical range for a budget
estimate?
-10 percent to +25 percent from actual
What is the typical range for a definitive
estimate?
+/-10 percent from actual
What is the difference between a cost
budget and a cost baseline?
The cost budget adds management
reserves to the cost baseline
What is the formula for cost variance?
CV = EV - AC
What is the formula for schedule
variance?
SV = EV - PV
What is the formula for cost
performance index?
CPI = EV / AC
What is the formula for schedule
performance index?
SPI = EV / PV
What are the formulas for estimate at
completion?
EAC = AC + bottom-up ETC
EAC = BAC/CPI
EAC = AC + (BAC -EV)
EAC = AC + (BAC-EV)/ (CPI x SPI)
comment: to update
What is the formula for estimate to complete?
ETC = EAC - AC
What is the formula for variance at completion?
VAC = BAC - EAC
What is the formula for to-complete performance index?
TCPI = (BAC -EV) / (BAC - AC)
How do variable costs differ from fixed costs?
Variable costs vary with the amount of
production or work done on the project.
Fixed costs do not vary with the amount
of production or work done on the project.
What is a direct cost?
What is an indirect cost?
Direct cost: A cost that is directly attributable to the project.
Indirect cost: Overhead costs or costs incurred for more
than one project.
What does life cycle costing mean?
Considering cost over the entire life of the product,
not just the cost of the project to create the product
What is value analysis?
Finding a less costly way of doing essentially the same
work (also know as value engineering)
